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Foreign Affairs minister Chrystia
Freeland still calls U.S. tariffs on Canadian steel “illegal and unjust;” “frankly
absurd”, but won’t say definitively if they would prevent her government from
ratifying the new NAFTA agreement, or what the U.S. calls United
States-Mexico-Canada Agreement.

The following opinion column by Ken Neumann, United Steelworkers National Director for Canada, has been published in the Globe and Mail.

A gloomy holiday season awaits thousands of Canadians whose livelihoods depend on our domestic steel and aluminum industries, their family gatherings sure to be tinged by a sense of foreboding for what lies ahead in the new year.

For months, workers and manufacturers across the country have increasingly been feeling the threat stemming from U.S. tariffs on Canadian steel and aluminum – levies that are widely recognized as illegal under international trade rules. These fears are exacerbated by recurring reports that the United States is making unacceptable demands for export quotas as alternatives to the illegal tariffs.

A chilling reality is setting in for more and more Canadians – our government has surrendered its leverage to fix the steel and aluminum crisis and avert devastation for so many families and communities.

Federal government data indicate that since the Trump administration’s “national security” tariffs came into effect in June, monthly Canadian steel exports to the United States have plummeted by up to 29 per cent and aluminum exports have dropped by as much as 25 per cent.

Canada’s steel and aluminum sectors directly and indirectly support 175,000 middle-class jobs across the country. With no positive resolution to the tariff dispute in sight, these Canadian families and businesses are bracing for the worst in 2019.

Faced with absurd American ‘national security’ tariffs on Canadian steel and aluminum products, only the United Steelworkers has consistently stood up for our members and all workers in Canada’s steel and aluminum industries.

Everyone knows Canada does not pose a national security threat to the U.S. – including Donald Trump. Trump acknowledged he was just using the baseless tariffs on Canadian steel and aluminum as leverage to extract concessions from Canada in the renegotiations on NAFTA.

Sadly, Canada’s Liberal government submitted to Trump’s numerous concession demands in the new trade deal – the USMCA. Even more unforgiveable, the Liberals did not even insist that Trump hold up his end of the bargain – lifting the bogus tariffs on Canadian steel and aluminum.

The magnitude of the Canadian government’s sell-out was made clear by Trump’s economics adviser, who gloated that “Canada gave very graciously.”

The Liberal government has attempted to justify the sell-out by arguing steel and aluminum tariffs were separate from the USMCA negotiations. However, Steelworkers – and the news media – have exposed this argument as patently false.

Unlike some others in the labour movement who are cheerleading this abject failure, Steelworkers are at the forefront in denouncing the USMCA for exactly what it is – a sell-out of tens of thousands of Canadian working families, in the steel and aluminum sectors, in dairy, egg and poultry farming, and the list goes on.

Those who negotiated this deal – with help from some in our labour movement – sold out steel and aluminum workers in exchange for some protections for auto workers.

It must be awkward for union leaders who support the USMCA and have members working in both the auto sector and the aluminum industry. As Steelworkers, we will never sell out one group of workers for another.

It is only the United Steelworkers who have consistently stood up for all Canadian steel and aluminum workers in our strong opposition to the tariffs and to the USMCA.

Federal MPs representing ridings affected by American tariffs on Canadian steel exports say they’re skeptical that a quota-based system can be a solution to the ongoing trade dispute, even after one major steel producer recently stepped forward to tell the House International Trade Committee that it would support certain quotas in exchange for a duty exemption.

At the committee meeting on Oct. 2, Kaylan Ghosh, president and CEO of Algoma Steel, located in Sault Ste. Marie, Ont., recommended the government “explore a quota-based system” as a solution for securing tariff exemptions.

Mr. Ghosh signalled openness to accepting a quota system similar to what Canada and the U.S. agreed to in the United States-Mexico-Canada Agreement (USMCA) on autos. Under the agreement in principle, Canada and Mexico will not be slapped with auto tariffs unless exports exceed 2.6 million units annually—a threshold significantly higher than current export volumes.

Such a scenario isn’t ideal for the industry, he said, but given that U.S. President Donald Trump indicated that quotas are his preferred approach, and that other countries have bowed down to those conditions, Canada could negotiate a similar fix.

Mr. Ghosh said a potential system should reflect historic exports levels to the U.S., and have the quota distributed company- and product-wise to ensure fairness and certainty over exports reaching American buyers. His company represents 40 per cent of the Sault Ste. Marie’s economic output, a city that has seen major job losses in the sector in the last generation.

The Canadian government says it will impose a 25 per cent surtax on some foreign steel products in a bid to head off dumping.

The Finance Department said “excessive imports” are harming the steel industry, prompting it to impose a surtax on seven products that range from rebar to wire rods.

The surtax, which begins Oct. 25, will be in place for 200 days, pending an inquiry by the Canadian International Trade Tribunal into whether longer-lasting safeguards are necessary, the government said.

The announcement comes more than three months after Canada imposed tariffs on $16.6 billion worth of American goods in retaliation for hefty U.S. tariffs on Canadian steel and aluminum.

The government also announced Thursday that some Canadian manufacturers can now import those products from the U.S. without paying the surtaxes that have applied since July 1. A portion of the relief will be temporary, offered until Canadian producers are able to adequately meet domestic demand.

The exemption applies on a case-by-case basis to companies that applied for it, and pertains to American steel, aluminum and certain other products.

The products affected by the fresh tariffs go into structures from condominiums to dams and bridges, “which encompasses a heck of a lot of steel,” said Jesse Goldman, a lawyer representing the Canadian Coalition for Construction Steel.

He said the surtax puts the construction steel industry in “a very dire position” because of Canada’s limited domestic steel supply.

“Because of the actual quota amounts for this type of steel from non-U.S. sources, U.S. steel is going to come into Canada at record high prices. They will simply pass on the 25 per cent retaliatory tariffs to their Canadian customers.”

The surtax on steel plates and other products could “jeopardize” mega-projects in Newfoundland, which relies almost exclusively on foreign steel, primarily from Europe, Goldman said.

A lot of imported structural steel has been put toward the refurbishment of the Parliament buildings, he added. “It’s more ironic than intentional, but it gives you an example of the importance of imported steel in Canada.”

The country’s geography deters West Coast buyers from purchasing from central Canadian mills. It costs more than four times extra to ship a tonne of steel to Vancouver from Ontario than it does from China or Korea, said Richard Lyall, president of the Residential Construction Council of Ontario.

With rebar an essential component in residential towers, the new steel tariff could boost the price of new condos in Vancouver by up to $10,000 per unit, Lyall said.

“Housing affordability got thrown under the bus on this one,” he said.

There was lots of discussion on what we can recycle, orders that we have down to the U.S. Questions on the Cheniere Line that we did that started the duties. He was also curious about the plants in the states, if they can do what we can. He brought up the LNG project that has been approved and hopes they use our products even though it is his understanding that some of it has to be brought in and can’t be produced here.

We brought up the obvious regarding the tariffs and the government leaving out steel and aluminum in the negotiations. How We had discussions with him over 15 months ago when this started coming to light{ section 232} and steel was what brought this to the for front and how could we be left behind. We’ve seen Wilbur Ross talk about how a new agreement would then naturally have the tariffs go away. This is as important to him as it is to us and he told us they are actively working on it. Freeland and Lighthizer are meeting this week and continuing discussions. I told him we don’t see how a “quota system” is beneficial to anyone this side of border and isn’t good in general.

We brought up how dumping has increased here in Canada and their response was that in the next couple weeks we should here some news on the “Safeguards”. Below was just released from the Federal Government last night.

His office is to keep in touch with us to continue these discussions and would like to know what our membership would like to see. The initial response was Duties and Tariffs gone and Unions to have the ability to file trade/dumping cases .

Canada does not hold out much hope that Washington will quickly lift tariffs that it imposed on steel and aluminum exports and is resisting a U.S. push to agree to strict quotas, two sources familiar with the matter said.

The administration of U.S. President Donald Trump imposed the tariffs on Canada and Mexico in June, citing national security reasons. Although Canada and Mexico agreed a renewed continental trade deal last week, the measures remain in place.

Lost in the debate on the Canadian government’s many concessions in the proposed United States-Mexico-Canada Agreement – “Canada gave very graciously,” as U.S. President Donald Trump’s economics adviser gloated – are disturbing provisions allowing Mr. Trump and future U.S. presidents to continue to impose baseless “national-security” tariffs on key Canadian exports.

When the USMCA was announced last week, it was both shocking and profoundly disappointing to see Canadian officials toasting this new trade deal while the United States maintained devastating tariffs on Canadian steel and aluminum exports.

When you break norms, those norms are very difficult to re-establish,’ says one former policy adviser to the Canadian Embassy in Washington, D.C.

Despite the safeguards against damaging penalties on Canada’s auto industry under the continent’s newly renamed trilateral trade agreement, the American ability to impose destructive tariffs under the guise of national security protection remains a lingering threat, according to trade experts who warn the damage may have already been done with aluminum and steel.

Since May 31, Canadian aluminum and steel have been subject to tariffs of 10 per cent and 25 per cent, respectively, which were imposed under Section 232 of America’s Trade Expansion Act. The provision in the 1962 legislation allows the U.S. government to impose quotas or tariffs on imported products for national security reasons—a rarely used tool before the administration of U.S. President Donald Trump.

If the U.S. wants to impose more tariffs on Canadian goods, it can say anything is a national security threat, since it’s already done it once, said Eric Miller, a former senior policy adviser to the Canadian Embassy in Washington, D.C., and current head of the Rideau Potomac Strategy Group.

“You have this situation where something that was meant to be a rarely used instrument has now become something that, over the course of the last few months, has basically become a normal part of trade policy that is designed to drive changes and concessions from established U.S. trading partners,” Mr. Miller said.

Canadian negotiators were unable to get the steel and aluminum tariffs lifted as part of the USMCA talks, but speaking to reporters on Oct. 1 in the National Press Theatre, Prime Minister Justin Trudeau (Papineau, Que.) flanked by Foreign Minister Chrystia Freeland (University-Rosedale, Ont.) said, “moving forward on eliminating the tariffs on steel and aluminum remains a priority for us.”

Ms. Freeland added that Canada is looking to take advantage of the momentum that they have generated through the conclusion of USMCA negotiations to “intensify conversations” on steel and aluminum tariffs.

Steel and aluminum prices have jumped 30 to 40 percent due to cross-border tariffs, the Department of Industry yesterday told the Commons trade committee. Officials did not detail the impact on consumer costs and factory layoffs.

“Higher steel and aluminum prices increase costs for many users,” said Assistant Deputy Industry Minister Paul Halucha; “The impact of the current North American trade climate on steel and aluminum goes well beyond the companies and the workers in this industry.”

U.S. and Canadian tariffs are 25 percent on steel and 10 percent on aluminum. The duties were left untouched in a tentative United States-Mexico-Canada trade pact signed September 30.

“The benchmark monthly steel price in North America has reached heights not seen previously since 2008,” said Halucha. “Since the beginning of the year the benchmark price for U.S. Midwest hot-rolled coil has increased from US$729 per ton in January to a peak of over $1,000 in July. From that high, the benchmark has fallen to US$956 per ton. This is in contrast to 2017 and 2016 when the average monthly price was $680 and $571 per ton respectively.”

“The all-in price of aluminum has surged more than 40 percent,” said Halucha. “There is no doubt the price increases are a result of the ongoing trade action.”

“There appears to be no end in sight,” said Conservative MP Colin Carrie (Oshawa, Ont.). “Are you worried about the long-term impact this is going to have on our Canadian steel and aluminum industries?”

“I’m an optimistic person by nature,” replied Assistant Deputy Minister Halucha. The committee was told the Department of Employment has contacted more than 120 employers in the trade with “known or announced layoffs”, but did not elaborate.

“It’s killing Canadian businesses,” said MP Tracey Ramsey (Essex, Ont.), New Democrat trade critic. “Once they close, the chances of them being able to come back again are very, very slim. We are in an emergency situation.”

Steel and aluminum mills employ 33,000 Canadians, by official estimate

Canadian steelmaker Essar Steel Algoma Inc. yesterday appealed to the Commons trade committee for help against U.S. duties. One factory owner told MPs’ tariff hearings that all Canadians are now paying for cross-border taxes.

“This has had a significant impact on Algoma’s exposure to the United States in the short period of time these tariffs have been in place,” said CEO Kalyan Ghosh. “We have seen a drop in exports to key states where we send the majority of our products – Minnesota, Michigan, Illinois and others.”

American tariffs are 25 per cent on Canadian steel and 10 per cent on aluminum. Cabinet imposed comparable retaliatory tariffs on U.S. imports July 1 worth more than $300-million.

VANCOUVER — Investors have given final approval for a massive liquefied national gas project in northern British Columbia.

The five partners have agreed to the $40-billion joint venture that includes a gas liquefaction plant in Kitimat on B.C.’s coast and a 670-kilometre pipeline delivering natural gas from the northeast corner of the province.

TORONTO, 1 October 2018 – Tens of thousands of Canadian families have been left in the lurch from concessions made by the Liberal government to get a deal with the Unites States on a renegotiated North American Free Trade Agreement, the US-Mexico-Canada Agreement (USMCA).

“Time and time again during the NAFTA renegotiations, the Liberal government assured Canadians that it was defending our steel and aluminum sectors and the livelihoods of tens of thousands of Canadian families,” said Ken Neumann, United Steelworkers (USW) Canadian Director.

“Given the Liberal government’s rhetoric throughout the process, it was inconceivable that it would agree to any deal that harms Canada’s steel and aluminum sectors,” Neumann said.

“Instead, the Canadian government struck a deal with the U.S. that fails to remove the senseless and damaging tariffs on Canadian steel and aluminium imposed by the Trump administration in June,” he said.

“Canadians expected that an agreement on NAFTA would result in the U.S. lifting the bogus national-security tariffs on Canadian steel and aluminium. Instead, it appears Canadian steel and aluminum workers are among those being sacrificed in the concessions made by the Liberal government in this deal,” he said.

“Rather than give-and-take negotiations that would generate new provisions to improve Canada’s trading position with the U.S., the Liberal government engaged strictly in concession bargaining,” Neumann said.

“The Liberals made concession after concession, until the Trump administration got the deal it wanted. In the process, Canadian government sold out Canadian steel and aluminum workers. So much for the ‘win-win-win’ deal promised by this government,” he said.

“Canada’s government must draw a line on this issue. The U.S. tariffs on Canadian steel and aluminum must be lifted immediately.”

“There are problems specific to steel and aluminum relating to our national defense, and at this point of time, those stay the same,” Ross tells Fox Business Network. “For that matter, there’s also a provision in here that if we put in a [Section] 232 on automobiles in the future, there will be an exemption of current levels from within the Canadian, Mexican manufacturing.”

Ross says a benefit of the new agreement is that 40%-45% of auto content will be produced at wages more than $16/hour, “meant to assure that the U.S. gets its fair share

Steel and aluminum tariffs imposed by the Trump administration have cost Ford Motor Co about $1-billion in profits, its chief executive officer said on Wednesday, while Honda Motor Co said higher steel prices have brought “hundreds of millions of dollars” in new costs.

“From Ford’s perspective the metals tariffs took about $1-billion in profit from us,” CEO James Hackett said at a Bloomberg conference in New York, “The irony of which is we source most of that in the U.S. today anyway. If it goes on any longer, it will do more damage.”

The United States has opened a new battleground in its trade war with the world, announcing preliminary anti-dumping duties on large-diameter welded pipe from Canada and five other countries.

The U.S. is to immediately begin collecting 24.38 per cent cash deposits on imports from Canada that were worth almost US$180 million in 2017, the U.S. Department of Commerce announced on Tuesday.

The other countries being hit with duties are China, Greece, India, Korea, and Turkey, with penalties ranging from 3.45 per cent for Turkey to more than 132 per cent for China.

India is the only country on the list that had greater exports of the pipe to the U.S. in 2017 than Canada, at $295 million US.

The decision is “disappointing” but it affects only one of his members, said Joe Galimberti, president of the Canadian Steel Producers Association, which represents the $15-billion primary steel production industry here.

The Quebec government is setting aside almost $900 million for companies affected by tariffs recently imposed on Canada by the United States.

Premier Philippe Couillard says his government will make $863 million available over five years in direct investments, tax subsidies and training.

U.S. President Donald Trump has imposed 25 per cent tariffs on imported steel and 10 per cent tariffs on imported aluminum from many countries including Canada, which has retaliated with tariffs of its own.

The provincial money will go towards offering companies liquidity to continue their activities, and to reduce contributions small and medium-sized companies have to make to the province’s heath services fund.

Quebec’s plan also aims to increase investment in the agricultural sector and it sets aside $55 million for labour-related programs.

Couillard says the five-year financial package is expected to spur $3 billion for the Quebec economy over the same period.

“We are living an exceptional experience that demands an exceptional response,” Couillard said.

“Evraz North America welcomes the actions by the Government of Canada towards initiating a domestic Safeguard action. This Safeguard is essential to stabilize Canada’s domestic steel market, especially for energy tubular products, with the goal that Canadian producers and steel workers are not further harmed by dramatic increases in offshore steel imports. “

“In addition to consultations, the USW continues to call for Canadian trade unions to have the right to initiate trade complaints,” emphasized Neumann.

The dumping of steel on the international market by countries including China, South Korea, Turkey and Vietnam has been a problem for the North American steel industry and workers for a number of years.

Once U.S. President Donald Trump imposed tariffs on steel and aluminum earlier this year, it was obvious the Canadian government would need to take strong action to avoid increased and specific dumping into Canada as a result.

In addition to fighting the imposition of U.S. tariffs onto Canada, the Steelworkers have consistently insisted that measures need to be taken by our federal government to protect Canada from further dumping as an indirect avenue into the American market.

“Today the federal government has taken a needed step towards aiding and safeguarding the Canadian steel industry. We welcome it and look forward to further measures to aid this essential Canadian industry,” added Neumann.

OTTAWA — The federal government will announce the start of consultations Tuesday on how best to address concerns that cheaper foreign steel is entering the Canadian market, industry representatives say.

Jesse Goldman, a lawyer representing the Canadian Coalition for Construction Steel, says the group has been informed by federal officials that Finance Minister Bill Morneau will make the announcement during an event at the ArcelorMittal Dofasco steelmaker’s offices in Hamilton, Ont.

Canada’s Border Services Agency (CBSA) released a statement on Aug. 10 that they have begun an investigation into dumping of “corrosion-resistant steel sheets” (COR) by Taiwan and other nations onto the Canadian market.

According to the announcement, the CBSA received a formal complaint from the company ArcelorMittal Dofasco G.P. on June 5 alleging that imports of COR were being unfairly dumped onto the Canadian market by the Taiwan, in addition to China, Hong Kong, Macau India and South Korea.

Referring to Taiwan as a “Separate Customs Territory,” the Canadian Border Services Agency even uses the terminology of the International Olympic Committee “Chinese Taipei” to refer to the country in the document.

According to the CBSA, there is “a reasonable indication that the dumping of (COR) has caused injury and/or is threatening to cause injury to the Canadian industry producing like goods.”

The CBSA subsequently began an investigation into the matter on July 28, and is now requesting information from all potential importers and exporters of COR for the period between April 1, 2017 and March 31, 2018 to be analyzes by the agency.

A preliminary ruling is expected to be made before Oct. 24, 2018, according to the announcement. If the imports indicate harmful dumping of COR, a subsequent determination on the scope and potential anti-dumping duties will be announced within 120 days of the preliminary ruling.

Stelco Holdings Inc. is poised to benefit from the steel tariff battle between Canada and the United States because as much as 85 per cent of the steel it makes is sold in Canada and not subject to tariffs.

“Trade cases are tightening the market here in Canada and giving us a good opportunity,” Stelco chief executive officer Alan Kestenbaum told analysts on the company’s second-quarter financial results conference call on Wednesday. “We will continue to focus on Canada. That includes potentially benefiting from demand created by declining sales of U.S.-produced steel into Canada due to Canada’s recently implemented 25 per cent tariffs against U.S.-made steel.”

Stelco, which emerged from protection under the Companies’ Creditors Arrangement Act about a year ago, will also gain from trade cases Canada has launched against China, South Korea, Vietnam and other countries on cold rolled steel and corrosion resistant steel, Mr. Kestenbaum said.

Safeguard trade actions that the federal government is considering to block countries from shipping steel into the United States through Canada will also help, he said.

“These safeguards seal the border” and should convince the United States that cheap steel is not being diverted to the U.S. market through Canada, he said.

He noted that Stelco’s upgrades of its cold mill coincide with the trade actions and “will expand our presence and product capability in the cold rolled steel market – now the most profitable market on a per ton basis in our portfolio.”

Effects of a trade war sparked by the Trump administration’s recent tariffs on various imported materials and products continue to unfold.

The U.S. imposed tariffs on steel, aluminum and other goods from Canada, Mexico and the European Union in early June and on China in early July. These countries imposed tariffs on U.S. goods in retaliation.

The impact of steel and aluminum tariffs is particularly strong and far-reaching. Media reports say there is little foreign steel and aluminum coming into the U.S. now, allowing domestic producers to hike their prices.

Corey Sheets, co-owner of Meadows Mills Inc. in North Wilkesboro, said American steel manufacturers started raising prices when tariffs were simply mentioned. Plate steel prices are up 30 per cent and structural steel prices rose 20 per cent recently, he said.